Pull-through production definition
/What is Pull-Through Production?
Pull-through production is a just-in-time manufacturing method that releases a production order into the manufacturing process when a customer order is received. Sufficient resources are assigned to the manufacturing process only at the point when the production order is released.
When to Use Pull-Through Production
Pull-through production is best used in situations where customer demand is relatively stable and predictable, allowing production to be closely aligned with actual orders. It is ideal for industries that produce customized products or operate with high product variety, where building large inventories would be costly and inefficient. Pull-through systems work particularly well in environments where suppliers and production teams can communicate quickly and adapt rapidly to changes. This approach is also beneficial when companies prioritize minimizing waste, reducing storage costs, and increasing responsiveness to customer needs.
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Advantages of Pull-Through Production
There are several advantages associated with a pull-through production system. They are as follows:
Reduces inventory investment. This approach minimizes any excess investment in inventory, since it should result in very little raw materials or finished goods inventory.
Reduces overhead costs. Since there is less inventory on hand, it also means that warehouse space can be minimized, which reduces factory overhead costs.
Enhances customer loyalty. A further advantage is that the immediate nature of these orders allows a business to offer some degree of customization to customers, which may increase their loyalty to the seller.
No obsolescence. There is no inventory obsolescence, since the manufacturer maintains no finished goods inventory.
Disadvantages of Pull-Through Production
Pull-through production has several disadvantages. It can lead to production delays if there are sudden spikes in demand, since inventory levels are kept intentionally low. This system also relies heavily on accurate forecasting and smooth communication across the supply chain, making it vulnerable to disruptions or errors. Additionally, smaller batch sizes and frequent changeovers can increase production costs and complexity, potentially reducing efficiency if not managed carefully.